All Forum Posts by: CK Hwang

Hi Oleg, don't think I can say anything that hasn't already been said but personally, if I was in your situation, I would spring for a really really nice tall fence to block out traffic and what seems to be a commercial or industrial space. The fence would help to create a sense of serenity from the traffic and maybe even block out some of the traffic noise and give buyers a sense of security.

But unfortunately, given the location, I think you would likely have to sell below comps to get the property moving due to the location. To give you a sense of how much of an issue a major road is, in my market, after much calculating and data tracking, I normally minus around $80K or around 10% off the comps to estimate ARV if the house backs to a major street. So perhaps it might make sense to take the comps, knock off around 10% and see what price you arrive at.

Michael, the neighborhood that your duplex is in, is it filled with single families with homeowners living in them? If so, and your duplex is non conforming to the neighborhood, you might have a hard time selling it later on without having to convert it back, which would then cost a bomb and basically strip any profits from the rental.

Second, you might want to check and see what rental yield you will receive. Duplexes in my neighborhood get pretty much the same rental yield as a SFR assuming you were to buy one now (5% with a varian of a few decimals), if your neighborhood is like mine, you might as well just rent it out as a SFR if you are getting the same yield and maintain the liquidity of your property, as I generally find duplexes a little harder to sell compared to a SFR in my area.

No suggestions other than to say i am so so envious. I have always wanted to work on a historical house, especially at the price you're getting it at. Most of my market is made up of stucco boxes built in the 80s. Generally not very architecturally inspiring.

Hi Spencer, so good to hear you're a wholesaler, could you please put me on your buyer's list? I'm a fix and flipper.

To answer your question above, I'm not a wholesaler, but I do occasionally wholesale deals when I get more inventory than I can handle since my business is really small at this time. And to further add to the disclaimer, I tend to work in nicer neighborhoods, so my perspective is skewed as far as subject 2 strategy.

So anyway, back to your question, I generally find it hard to do subject 2 wholesale deals in Orange county. I've tried, but I generally find it hard for the properties I work with because

1. There is a high high demand for properties in the areas I work in (coastal orange county), so there is generally very little incentive for an owner to option their property.

2. The property prices around here tend to be so so high, that even if they optioned the property off, there wouldn't be enough cash flow for them to be able to purchase or rent another property as most people who are in a situation where they need to option their property, aren't making enough for the bank to make a second loan in the $500K+ range. Also often it is hard for the buyer to afford the option if the property price is too high.

I can imagine in parts of the country where house are below $200K, it would be much easier to get a second mortgage allowing the owner to option the first one off. I really think coastal cities require a somewhat different strategy.

For example, I recently came across one seller who was open to optioning their house, owed $1.2m and value at $900K, and just wanted to get out of the monthly payments, but did not want to short sell as they didn't want to take the hit on the credit. Unfortunately, as much as I would have done the deal, with a monthly payment of $6K+, there really isn't many people who could afford the option or wanted to, not to mention the loan was about to come due, so the buyer would have a limited time to excercise the option.

For my market, I've generally found it easier to build a list of ready buyers, then call or email them when I have something under contract. Of course you'll need money for the EMD, so that would be something you need to solve.

However, as far as Socal goes, i don't think all is lost, I think there might be potential to do options in places like Long Beach and LA city where there does seem to be a greater abundance of lower priced properties.

Just some thoughts from my limited experience.

Here would be my strategy if I had $40k.

1. Spend $20 on buying the Bigger Pockets book on house flipping. Read it cover to cover about 3 times. Clarify any questions you might have with the BP community.

2. Use the remaining $39 880 to buy some distressed property close to you and rehab it. Put everything you learned in Step 1 into use. After the project is done, collect profit and repeat steps 1 & 2

Feel free to send me a check for $2K for teaching you how to make money in less than an hour. :D

It's really hard to say, you need to know more about the neighborhood. Last year, I jumped on a property that popped up in a neighborhood with little or no sales history and nothing else for sale. But I figured the reason being that no one wanted to move out, as it's not easy to find SFRs selling sub $800K walking distance to beach here in Socal. Luckily the gamble paid for me.

Hey everyone, over the last few weeks my deal pipeline has started to ramp up to more than I can handle and there is one deal I am currently negotiating a short sale in which I might not be able to take on and so I'm looking to wholesale it in about 60 days.

Sorry if it is a bit vague right now as I am still in the process of getting paperwork signed etc, but I thought I would seek an expression of interest first and once things are finalized I will release the information to people on the buyers list.

Location: Coastal Orange County, California ( I will reveal address and location once I have tied up the deal which should not be too long)

Estimated purchase price: $685K (my wholesale fee is included in this price)

Estimated repairs: $60K-$80K

Breakdown of $60K as follows

Must do repairs: $40K

Upgrades: $20K-$40K

Estimated turnaround time: 1 month

Estimated ARV 1: $830K if only basic is done

Estimated ARV 2: $880K if upgrades are done

Estimated profits: $50-70K clean and clear after transaction fees, RE agent commission of 5% on sell side after work is done. This number does not include financing fees or interests if you want to borrow hard money.

Deal type: This is probably best for a flipper to retail market. I don't think there is enough meat to wholesale it a second time.

Terms: At this time, this needs to be an all cash deal as there are certain parts of the house that are damaged and would not allow for traditional financing. There is however, to my best of knowledge, no un permitted additions.

Once again apologies for being vague, but will reveal more as I get more confirmation from the bank.

For now, if you are interested in being a buyer, please email me [email protected] to be added to buyers list

Once things are more firmed up, I will require a proof of funds, then it will be first come first serve to whoever can meet the closing date.

Thank you for looking.

Markeilsha, good on you, I think you're doing the right thing getting the inspection done.

Personally, I would fork money over for the home inspector for an objective view of what needs to be done to the house to get it up to code and build the cost into your wholesale fees. I can't speak for other investors, but i would have no issue if you wanted to include the costs of an inspection report when wholesaling a house to me because it would have been something i would have paid for anyway.

From working with wholesalers, I find that supplying an inspection report is one of those small little things you can do for not a lot of money to build up a good reputation among buyers as a wholesaler that knows their stuff and no BSing me when it comes to repair costs. Little things like this shows me the wholesaler is committed and not trying to hide anything, and I really appreciate that.

Also, I've found that trying to find contractors on craigslist is the absolute worst way to find contractors. They are on craigslist for a reason. Good ones generally don't need to advertise on craigslist.

I guess the bigger question is whether you have the property under contract? if you don't, then yes, the inspection fee is at risk. If possible, I would try and secure the property either through a purchase option or have it under contract before trying to wholesale it.

Wow trying to wholesale a fixer upper out of area is not easy. What I would do would be to pay a property inspector and get a written report, then get quotes from contractors in the area the house is in to get estimates to deal with the defects. All this can be done on the phone or email. With that you have the repair costs and ARV. Enough info for most investors to make a decision.